Social media spurs online retail

Online retailers must exploit the power of social media to boost numbers of site visitors and conversion rates, according to web experts speaking at the annual Internet World show in London this week.

More than half of online stores have hitherto failed to embrace Web 2.0-type technologies, Forrester analyst Victoria Bracewell-Lewis told delegates. But the pioneers' success will soon change that, she added.

Since July 2006, for example, retailer Topshop has seen more visitors to its site come from its pages on social networks like MySpace than from search engines. "If you're paying megabucks on a paid search campaign and then see that your social network pages which you put up for minimal amounts of money are the main driver for traffic, the board is going to [reconsider where it allocates] the budget," said Bracewell-Lewis.

Consumer reviews are also driving up conversions and improving customer loyalty, according to Bracewell-Lewis.

"This is true of practically every online retailer which has adopted the Amazon model of consumer-generated reviews within their sites," she explained. "We give more credence to another consumer's views than we do a brand-generated message."

And ratings don't need to be positive to increase conversions and lower the number of returned items, she argued – volume is more important than the content in this regard.

Bracewell-Lewis highlighted DVD.co.uk which has had use Web 2.0 tools to increase sales. The firm used "searchandising" techniques – displaying site search results alongside also-boughts suggestions and user reviews, to improve hard conversions by ten per cent.

Elsewhere at the show, experts highlighted the importance of Web 2.0 tools to the enterprise. Siddharth Jhunjhunwala, managing director of Web Spiders, argued that technologies such as blogs, wikis, social networks and forums could enhance knowledge management within organizations.

He pointed to several big name companies which have utilised these technologies, including computing giant Dell, which operates a StudioDell video sharing web site to showcase its own and user videos. General Motors and hotel chain Marriott were also hailed for employing blogs to good effect, keeping customers updated on the latest news in a way web sites often fail to do.

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